What do the APRA lending changes mean for SMSFs?

Summary

This week saw the introduction of new bank rules by the regulators, in an effort to curb the overheated property markets of Melbourne and Sydney.

Many of our new SMSF clients could be indirectly affected by these changes and the tightening in general APRA is encouraging on investment loans.

The rules primarily seek to reduce the amount of interest only loans being written by banks, and also increase the scrutiny of interest only loans above 90% LVR. This does not impact SMSF lending directly, however, they also have required investor lending by banks to stay below 10% growth.

How will this impact SMSF lending?

SMSF lending falls into the category of investor lending, and the bank lending changes from APRA will mean that it will take longer for SMSF clients to procure financing, and also, it will be harder for the top tier banks to lend to SMSF's and keep below their 10% growth in that segment.

What will we do?

WAI Group will continue to work with a wide variety of brokers, banks and lenders to ensure our clients have access to excellent funding options and strategies for their retirement outcomes.